The hypothetical royalties that represent the largest part of those claims are based on Google's mobile business, but it now turns out that Oracle additionally wants to be paid for the positive effect of Android on Google's non-mobile business.

In formal terms, the letter contains a request by Oracle that the court compel Google to produce (in terms of "present") information related to its non-mobile business over the last seven years, as well as Google's firm opposition to that request. In this discovery-related context, the letter also expresses different views on whether any effects of Android on Google's non-mobile business should or should not be added on top of the damages claims previously presented.

This paragraph from Oracle's part of the joint letter outlines its theory that it is owed money based on network effects (meaning that Android serves to further cement Google's dominant position in the search market):

In the report, [Oracle's damages expert] Dr. Cockburn explains that Android is part of a network market, in which adoption of Android feeds the growth of Google's brand generally and non-mobile business specifically, particularly as mobile (and Android) usage becomes increasingly significant. [...] Google's refusal to produce non-mobile data has precluded Dr. Cockburn from quantifying these effects, which likely represent very significant benefits to Google of the patent and copyright infringement at issue in this case. [...]. Moreover, Google documents from before the infringement began make clear that Google specifically intended Android -- for which it relied on Oracle's intellectual property -- to provide precisely this strategic benefit to Google's core non-mobile business. For example, Google's 2007 "Mobile" presentation, explains that mobile "increases ROI [Return on Investment] . . . [a]cross entire universe: Web, PC, phone".

Google argues that the Cockburn Report is off-base even in its current form and that this problem would only get worse if additional damages claims based on Google's non-mobile business were thrown in:

Yet, Cockburn's already hyper-inflated multi-billion dollar damages calculation is not enough to satisfy Oracle, which seeks to increase the damages calculation by laying out, at considerable effort, speculative theories as to direct and indirect revenue that Google purportedly attained or could have anticipated with respect to Android. Having improperly assumed without any basis that the asserted patents and copyrights account for the entire value of Android, Oracle should not be permitted to exacerbate the problems with the Cockburn Report by incorporating into its damages analysis data that bears no reasonable relation to the issues in this case.

Oracle claims that "Google has refused to produce any non-mobile data" despite "a series of requests" made "[o]ver the course of the last five months." According to Oracle, Google always just referred to publicly available information such as SEC filings. But Oracle wants certain "non-mobile datasets", broken down to a "daily frequency (or finest frequency available), from 2004 to the present, by country":

Total search volume, by operating system (and by keyword if available)

Number of banner ads served by DoubleClick

Click-through-rates for display ads (by keyword)

Click-through-rates for search ads (by keyword)

Market share of search volume, by search provider

Average cost-per-click paid by advertisers for search ads

Average cost-per-impression paid by advertisers for display ads

Revenue run rates for search ads (by keyword)

Revenue run rates for display ads (by keyword)

Web content indexed by Google

Number of apps for the desktop (e.g., gmail)

According to Oracle, "Google responded that the requests for non-mobile data were 'late,' 'overly broad,' and 'irrelevant.'" In todays filing, Google also describes them as "unduly burdensome and untimely". While it could require a significant effort on Google's part to put that information together, most of it probably is available in Google's own databases. Also, Oracle is not a competitor of Google's search business. I don't think the purpose of that request is harassment. If Oracle wants more money, that's a credible motivation all by itself.

Maybe Google is uncomfortable with the whole "network effects" issue because whatever information becomes available in this context could be used against Google in antitrust investigations in the US, Europe and Asia. Theoretically, the findings in this regard could even provide regulators and other companies with arguments for placing more emphasis on Android in those investigations. But again, I doubt that Oracle has any interest in harming Google's other business interests. Apparently, Oracle just wants more money.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents.

Subscribe To

Followers

Total Pageviews

Search This Blog

About Me

Florian Mueller is an app developer who used to be an award-winning intellectual property activist. His 30 years of software industry expertise span different market segments (games, education, productivity and infrastructure software), diverse business models, and technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof, except that he is long AAPL.) He is now developing games for smartphones and tablet computers.